Drilling advances

Vol. 233 No. 7

Frac companies now pitted against tortillas

As many of you are doubtlessly aware, we have a serious bean problem. More specifically, the astronomical price of Cyamopsis tetragonoloba, commonly known as guar bean, is threatening to change the face of fracs, as we know them today.

Owing to the historic run-up in hydraulic fracing, farmers find themselves unable to churn out enough feedstock for guar gum, the key gelling agent for the high-viscosity frac fluids that make sure proppants are put in their proper place. While most folks expect the supply to rebound next year, Bloomberg in the meantime says costs have jumped more than 500% in a little more than a year. Halliburton even cited the exponential increase in guar gum for lower-than-expected second quarter earnings, telling Reuters it now accounts for as much as 30% of the cost of some frac jobs.

This annual legume likes arid and semiarid climates, and though drought-tolerant, thrives with frequent rainfall. Consequently, the most ideal conditions for guar bean production are found in the sandy soils of northern India and Pakistan, which together harvest some 95% of the world’s supply. Once-hardscrabble farmers in those countries have now taken to calling guar beans “black gold.” Farmers in West Texas, parts of Australia and Africa also produce guar, but their collective output is miniscule by comparison.

Operators and frac companies face stiff competition, as guar beans are used to thicken, bind and stabilize myriad foodstuffs, everything from baked goods to ice cream. It also is used as a bulk laxative, which opens the door for all manner of marketing taglines. The costs and supply problems have trickled down, with Jeff Gelski of Food Business News bemoaning recently that “the oil industry’s increased use of guar gum has escalated prices, leaving food and beverage processors struggling to find supply of the ingredient used in such applications as ice cream and tortillas.”

Push for alternatives. Not being up to speed on food making, I’d be hard-pressed to comment on what’s being done to find guar substitutes for a tortilla. But, where fracing is concerned, efforts are afoot to find cost-effective alternatives that are as equally environmentally friendly as guar-based frac fluids. Companies likewise are re-thinking how they actually frac wells.

Long-used slickwater treatment is one of the more obvious ways to lower guar-induced frac costs. Since water fracs rely on high-volume flowrates, rather than viscosity, to create fractures, transport proppant and place same, there’s no need for guar gum. However, lacking the carrying capacity of a thicker fluid, slickwater fracs can only suspend and carry low-density and small-diameter proppants that typically are built around much-less-costly brown or white sand. In many cases, unless the narrower fractures they create are propped open with a high-conductivity proppant, production could be left behind, some say. What’s more, the low compressive strengths of standard sand-based proppants tend to render them unstable under the weight of the higher confining pressures encountered in deeper fracs.

Pioneer Natural Resources says that in wells with relatively shallow frac stages and low confining pressure, conventional white sand proppants are just dandy. While not clarifying the depths, the Fort Worth operator told investors in June that it has stimulated 45 shallow Eagle Ford wells using white sand proppants with “early well performance” similar to that of direct offsets that used stronger ceramic proppants. The operator says half of its Eagle Ford program is carried out in shallower areas, where using sand proppants can reduce aggregate frac costs some $700 million.

In June, Pioneer engineered the ultimate hedge against future sand prices with its purchase of the Brady, Texas, mine that, as of now, annually produces 1 million tons of brown sand. The so-called Hickory frac sand is earmarked primarily for frac jobs in the vertical Sprayberry trend of the Permian basin, the Wolfcamp shale of  West Texas and eastern New Mexico and the Barnett shale combo in the Fort Worth area.

While resin-coated sand proppants are stronger, it is generally accepted that in deeper applications, ceramic or sintered bauxite provide the ideal combination of crush resistance and high conductivity. The problem is, for slickwater fracs, these materials usually are too heavy for transport with a thinner fluid.

One option comes from Carbo Ceramics of Houston, which says its line of resilient but lightweight ceramic proppants is engineered with density that is equal to and, in some cases, lower than sand. Consequently, Carbo claims that when used with slickwater treatments, the lighter proppant is easily conveyed and placed in fractures, while also delivering considerably higher flow capacity.

LPG option. Perhaps the best alternative comes from Canada’s aptly named GasFrac Energy Services Inc, which says its technology does away with conventional frac fluids altogether. The Calgary company employs a patented liquefied petroleum gas (LPG) gel that uses no water and, therefore, requires no guar or any other additive to impart viscosity.

Besides the obvious easing of water worries, GasFrac says its closed stimulation technology is safe and, since it mainly relies on naturally occurring propane, is non-damaging to formations. The LPG process made its debut in the tight McCully gas field in New Brunswick, Canada, and has since entered the Eagle Ford. There, a company spokesman said the process has been used on upward of 15 frac jobs, where it not only eliminated the need for water-based stimulations, but also yielded higher initial production rates than conventionally fraced wells and helped bring production online at a comparatively faster pace.

Hopefully, these and other solutions will help reduce the economic burden. In the meantime, perhaps we should cut back on ice cream.